What is a No Win No Fee Agreement?
Conditional fee arrangements (CFA) more commonly known as a No-win No-fee agreement, has become increasingly popular across the UK since access to Legal Aid was withdrawn.
This facility enables people who may otherwise not be in a financial position to afford it, to still make a claim against a company or other body through the courts. Typically, it is used to fight personal injury claims and unfair dismissal, for example.
Over the last few years law firms have increased the types of cases that they are prepared to take on under a conditional fee arrangement.
In simple terms, the conditional fee agreement, or ‘No Win, No Fee Agreement’ is a contract drawn up between a solicitor and the client to safeguard both parties and ensure that the terms of the agreement are clear.
The premise of the contract is that the solicitor will carry out the work for no upfront costs or fees. In return they will take a percentage of the damages that are awarded once the case is won. If the claim is lost then the law firm will not charge for their time or any inhouse costs.
If you apply to make a claim on a no win, no fee basis the solicitor will carefully consider the initial facts and evidence to calculate the chances of making a successful claim before accepting the case. They will only take on your case if they believe there is a higher than 50% chance of winning it.
What About Costs For The Other Side If I Lose?
Depending on the case, the solicitor will usually take out an ‘after the event’ (ATE) insurance policy to cover the costs awarded against you should you lose lose the case.
There is no upfront cost for the premium of the ATE insurance. If you lose the ATE insurance won’t cost you anything and the insurance company will cover the costs awarded to the other party. If you win then the insurance premium is taken from the damages awarded. Unfortunately, you cannot add the cost of the premium onto the total amount of the claim.
Legal Expense Insurance
You may well already have legal expense insurance included in your home policy. It is worth digging out your policy documents to check as this can save you forking out for the ATE insurance.
It Isn’t Called ‘Win, No Fee’!
To compensate for the risk of taking on the case the law firm will charge a success fee if the case is won.
Solicitors can take up to 25% from the total amount of the damages. The amount will be clearly stated in the no-win, no-fee agreement.
What is the Difference Between A Solicitor and a Claims Company
There is some confusion related to claims companies and claims solicitors. A claims company is similar to an insurance broker. They tend to work with a number of different specialist solicitors.They will pass your claim to the law firm that they think will be best suited or the most experienced for your case.
Law firms like to build up experience and specialise in certain types of cases. Over time this experience is, of course, invaluable when it comes to processing and litigating a claim.
They already know all the arguments for and against and, with the knowledge of previous cases, are in a far better position to negotiate and win, than a solicitor who has only just started to take on these cases. They also gain a reputation for their expertise in this area, which is helpful, as it makes it less likely for the opposition to go to the expense of fighting a case if they know their chances of winning are low.
The claims company will receive a referral fee from the solicitor for passing the case across but there is not cost to you and so makes no difference to you which whether you go direct to a law firm or through a claims company.
What To Look For When Choosing A Company To Take On My Cavity Wall Claim
As mentioned above, some firms have been involved in cavity wall claims for several years and some are only just dipping their toe in. You don’t want these inexperienced solicitors practising on your claim.
With that in mind, it is important to find out how long the company have been taking on and working these cases.
Not only should an experienced law firm have a better chance of a successful outcome but they should also be able to handle the case much faster, resulting in a faster payout.
Bigger is not always better. We have found that it can be better to work with the smaller Solicitors than the larger ones. This is because the smaller companies take a more personal approach and there are fewer people involved in a case. For larger law firms it can be a numbers game, and your case can get passed from one desk to another and lost in the huge pile of other cases, especially, if there is an issue or something that requires additional attention.
Read the CFA carefully and do not be afraid to ask questions or get clarification on any point that you do not understand before signing it.
You don’t Have To Go Down The No-Win No-Fee Route
If you believe you have a strong case for a claim, and you have the funds available, you can instruct a law firm to do take on your case without signing a no-win, no-fee agreement. The choice is yours. These cases can take a year to eighteen months, and sometimes longer, and the legal costs can be considerable. You have to weigh up the risks and the cost of paying your legal expenses and the other parties costs awarded against you, should you lose, against the 25% success fee.
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This article is for information guidance only.
We are not legal professionals and before entering into any contract it is important to seek independent legal advice.